Buyside M&A question
Since for most acquisitions, the acquirer stock price goes down - I am confused what a buyside m&a pitch looks like.
Say the acquirer company A has a stock price of 50. Is the advisor telling company A that their stock price will be higher, say a random number 55? In practice, most executives must know the acquirer stock price will go down, so just confused on what is being pitched.
Synergies, multiple expansion, new market / product offering penetration, etc.
Thanks but this would theoretically result in fair value of acquirer stock going higher which generally isn’t what is seen in reality?
You are confusing market sentiment with business fundamentals. Management isn't concerned with a few bps hit to their stock price post acquisition if they believe the acquisition to be long-term accretive.
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